Inside Asian Gaming

inside asian gaming August 2014 10 Feature types of people but rather about safeguarding social stability,” says Kwan Tsui Hang, vice president of the city’s largest labor group, the Macau Federation of Trade Unions, and a member of the Legislative Assembly. “It is about providing opportunities to Macau residents— particularly the middle-aged and the low-skilled—to obtain a more stable and higher-paying job.” To accomplish this it is all but certain the government will have to stick closely to its own yearly cap on new table games. “We do not rule out that the [new Cotai] projects can get all the tables they have requested—namely 500-700 tables each—10 years later,” Secretary for Economy and Finance Francis Tam has said. “But for the 10 years starting 2013 we are certain that the government will not grant all the tables each project has requested … based on the annual rate of increase of no more than 3%.” Between 2006 and 2009, 75,691 new local and non-local employees—an average of 18,923 a year—were sufficient to support at least 15 new casino hotels that opened during the period, including The Venetian Macao, City of Dreams, Wynn Macau, MGM Macau and Grand Lisboa. The number of dealers shot up by 14,688 over the same period to serve the additional 3,382 gaming tables, with 4.3 dealers manning each table, versus Morgan Stanley’s assumption of seven dealers per table. Should the cap be strictly adhered to there will only be 1,646 incremental new tables allocated to the new projects, Credit Suisse analysts Kenneth Fong and Isis Wong estimated in their latest report on Macau gaming. “If the government approves all the table requests and projects open at the same time, this would create a huge pressure on wage costs and local SMEs, and potentially cause social discontent. This is what the Macau government doesn’t want to see,” they said. David Chow, co-chairman and chief executive of resort operator Macau Legend Development and a former legislator, believes the government has the situation under control. “The pace of gaming development can be controlled by the government, not by the gaming companies,” he says. “If all the projects open at the same time, I really don’t know how they can operate. But if the openings can be staggered into different phases I don’t think it will be that difficult.” Macau Legend owns the Pharaoh’s Palace, which is located in the company’s Landmark Macau Hotel, and a second SJM satellite casino, the Babylon, located at the company’s Macau Fisherman’s Wharf outdoor leisure complex near the city’s main ferry terminal. Fisherman’s Wharf is in the midst of an expansion and makeover slated for completion in 2017. Mr Chow is hoping to get an additional 350 gaming tables at the complex, and he will need 5,000 more workers. HELP FOR THE AGING In view of the government’s current reluctance to make any changes to its labor policy, casinos are seeking other solutions. Technology could be a big part of the answer. At the Macau Jockey Club Casino, which reopened on 30th April after a decade of closure, chipless e-baccarat tables supplied by gaming equipment manufacturer Paradise Entertainment have paved the way for the hiring of older, lower-skilled dealers who previously were not considered suitable by casinos. “The digital interface speeds up the game, with automatic payouts doing away with the need for dealers to do mental calculations. Calculating the 5% commission on banker wins was quite difficult for some of them,” says Jay Chun, chairman and managing director of Paradise Entertainment. “[The e-baccarat table] provides a new solution to the dealer shortage Macau will face in the coming years.” Mr Chun calculates that by using e-baccarat tables and the chipless system, the Macau Jockey Club Casino has reduced its staffing requirement by two-thirds. Morgan Stanley says deploying more electronic gaming tables and improving productivity could help ease the city’s labor shortage, but warns: “ETGs are generally less appealing to gamblers, resulting in lower yield per total machines combined than an equivalent table.” For the University of Macau’s Davis Fong, part of the solution hinges on adapting to certain demographic realities. “The question right now is whether casinos will be willing to put forward less youthful faces to their customers on their front lines,” he says, adding that “more than a few” middle-aged residents would be willing to work as dealers if casinos welcomed them. “The pace of gaming development can be controlled by the government, not by the gaming companies.” David Chow co-chairman and CEO, Macau Legend Development